21.1.10

Why might the market rest for a while?

We think the market is ready for some rest. Probably is not going to change the whole scenario, it could even make it more trustful. In the graph (click on to enhance), we show de futures of the S&P 500 as the benchmark of the market. Let´s explain our view based upon 3 key points we want to highlight:

Huge divergence in the Chaikin oscillator which is related to volume (orange segment in price going up, in the oscillator going down).

We are around the 50% Fibonacci retracement of the downfall. We could have seen some extension to create a trap (blue small rectangle).

The target is quite clear and consists of 2 values: the former resistance at 950 and de 38% Fibonacci retracement of the rally (957). It makes sense to try a pull-back from upside.